Common knowledge plays an important role in coordination problems and coordination problems are central to many areas of economic policy. In this paper, I review some common-knowledge puzzles culminating in the electronic-mail game. These puzzles may seem distant from practical concerns. However, I then argue why insights derived from this literature are useful in interpreting empirical evidence of how people coordinate under uncertainty and in understanding the role of communication in coordinating behaviour.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Management, Monitoring, Policy and Law